Guild Mortgage has launched a new conventional loan program that requires only a one percent downpayment from the homebuyer. Combined with a two percent grant from Guild, the three percent equity results in a loan with a 97 percent loan-to-value (LTV) ratio. The grant does not need to be repaid.
“We were able to create this breakthrough national program because we are a direct lender with many decades of strong investor relationships and first-time homebuyer expertise,” said Mary Ann McGarry, president and CEO of Guild Mortgage. “We wanted to make homebuying more attainable for more people, including Millennials who are entering the housing market in increasing numbers.”
A recent study from the National Association of Realtors (NAR) estimates that Millennials represent 32 percent of all homebuyers and 68 percent of first-time homebuyers. However, Millennials can have trouble saving for a downpayment because of student loans, credit card debt and high rent costs, according to NAR.
“With the gift of a two percent grant, Guild is helping solve financing challenges for first-time and move-up buyers with low-to-moderate income,” said David Battany, executive vice president of Capital Markets at Guild. “Because this is a downpayment assistance program, there are income limits, required homebuyer classes and additional parameters. Income limits do not apply for properties in low-income census tracts.”
Here are key components of the Guild One Percent Down loan program:
►Non-borrower household income can be used to qualify
►Boarder income can be used to qualify
►Debt-to-Income ratio (DTI) up to 50 percent
“Guild’s one percent down loan program provides a unique option to low- and moderate-income homebuyers who are having a difficult time coming up with the downpayment,” said Battany. “We developed this program because of our history of working with first-time homebuyers for more than 50 years and what we saw as a need to fill a void in the market. Now, many homebuyers will be in a stronger position to afford a first home, or even upgrade to another home.”
